Line2: Turn an iPod Touch into an iPhone

There’s some big news about Line2, the iPhone app I reviewed in March. As I’m sure you remember, I wrote:

For a little $1 iPhone app, Line2 sure has the potential to shake up an entire industry. It can save you money. It can make calls where AT&T’s signal is lousy, like indoors. It can turn an iPod Touch into a full-blown cellphone. And it can ruin the sleep of cellphone executives everywhere.

Line2 gives your iPhone a second phone number — a second phone line, complete with its own contacts list, voicemail, and so on. … But that’s not the best part.

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Line2 also turns the iPhone into a dual-mode phone. That is, it can make and receive calls either using the AT&T airwaves as usual, or — now this is the best part — over the Internet. Any time you’re in a wireless hot spot, Line2 places its calls over Wi-Fi instead of AT&T’s network.

That’s a game-changer. Where, after all, is cellphone reception generally the worst? Right — indoors. In your house or your office building, precisely where you have Wi-Fi.

Line2 also runs on the iPod Touch. When you’re in a Wi-Fi hot spot, your Touch is now a full-blown cellphone, and you don’t owe AT&T a penny.

But wait, there’s more.

Turns out Wi-Fi calls don’t use up any AT&T minutes. You can talk all day long, without ever worrying about going over your monthly allotment of minutes. Wi-Fi calls are free forever.

I calculated that Line2, even at $15 a month, could save you money:

If you’re in a Wi-Fi hot spot most of the time (at work, for example), that’s an awful lot of calling you can do in Wi-Fi — probably enough to downgrade your AT&T plan to one that gives you fewer minutes. If you’re on the 900-minute or unlimited plan ($90 or $100 a month), for example, you might be able to get away with the 450-minute plan ($70). Even with Line2’s fee, you’re saving $5 or $15 a month.

Well, now there’s a new Line2. All kinds of fixes and enhancements are in the new app — you can delete individual Recent Calls entries, incoming calls to your Line2 number ring your iPhone even if Line2 isn’t running, and so on. But the big news is the two changes to the value proposition.

First, Line2 now costs $10 a month instead of $15.

Second, you can now send and receive text messages using your Line2 number.

That’s very convenient, of course, because it means people don’t have to remember to use one number to talk to you, and a different one to send text messages. It’s also great because you can now do text messages when you’re in a Wi-Fi hot spot but have no AT&T signal indoors.

But the best part is how much money you could save. As the company explains it:

AT&T’s unlimited calling plan is $70 [not including the mandatory $30 for Internet service]. Unlimited texting is another $20. So for unlimited calling and texting, you must pay AT&T $90 a month. With Line2, you can drop your AT&T texting plan entirely, and drop your calling plan to the 450-minute plan at $40. So subtract $50 from your AT&T bill, add our new price of $10, and you are saving $40 a month!

It’s pretty persuasive math.

And here’s something else persuasive: Line2 turns an iPad or iPod Touch into a Wi-Fi iPhone. If you’re a parent whose child is begging for a first cellphone, this could be a cheap way to grant calling and texting without a two-year AT&T commitment. (Many schools and most colleges these days have campuswide Wi-Fi, and the current iPod Touch has a built-in mike.) Whenever you’re not in a hot spot, calls go to voicemail, and you get e-mail to let you know. Text messages appear as soon as you’re back in a hot spot. You can return the messages and calls at that point.

The new texting feature works great; I even tried sending texts to and from my Google Voice number. Text message back-and-forths show up in little cartoon bubbles, exactly as they do in the iPhone’s own texting app.

The one catch: For now, Line2 doesn’t do picture and video messages — only text messages. (The company says it’s working on it.) Of course, you can always send photos and videos over AT&T’s service for the 20-cent à la carte message fee, even if you’ve canceled your AT&T texting plan.

Overall, the lower fee and the unlimited texting make Line2 even more attractive (and further distinguish it from calling-only programs like Skype; see this comparison). My one worry, in fact, is that this review will swamp the company’s servers and drag the service down with it, as my first review did.

The company, Toktumi, says that this time, it’s ready for the Pogue Effect. “Toktumi spent $100,000 in new server equipment. Expanded, better trained support team. More than 100,000 phone numbers available in inventory.” Well, O.K. then.

All I know is that I’ve been using Line2 for months, and love the ability to make calls indoors and in other corners of the world where the AT&T signal doesn’t reach. But to have that, unlimited texting and $30 or $40 a month off my AT&T bill?

That’s very persuasive indeed.